Exports: How to develop foreign markets;

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How To Develop Foreign Markets
In 1784 an American ship, the Empress of China, sailed out of New York har-bor bound for Canton with a cargo of tar, turpentine, ginseng, brandy; and wine. She traded these for lea and silk, and returned home 15 months later flush with the discovery of a rich new market for American exports. Lured by-high profits and undeterred by the long, arduous voyage, other ships soon followed, and within four years American trading vessels represented a third of all foreign traffic in Canton.
The China trade of the early 1800s carried only a small share of U.S. ex-ports, yet it exemplifies the crucial place that foreign trade once held in American commerce and the excite-ment it was capable of kindling. Today, with the 1978 trade deficit weighing in at a record $28.5 billion, we would do well to revive some of our forefathers' hardheaded enthusiasm. Speaking at an annual meeting of the National Chamber of Commerce this spring, Commerce Secretary |uanita Kreps warned, "The United States can no longer consider its economic future as independent of the rest of the
world We are now more dependent
than ever on export markets as a source of growth for our industry, and on foreign sources of supply for need-ed raw materials." She also declared that international trade will be central to U.S. economic survival in the 1980s.
Strengthening our export position means reversing a trend that has been building for the past twenty years. Since l%0, U.S. exports have grown only about halt as fast as total world trade. From 18.2 percent of world
by FREDRIC L. BLANK/Partner, Atlanta
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trade in I960, U.S. exports declined to 10.7 percent in 1977. True, the picture has been somewhat distorted by spi-raling oil prices in the 1970s; however, U.S. trade share had already slipped to 15.4 percent in 1970, before oil prices started to climb. What's more, other non-oil exporters have fared well, de-spite the oil price rise. Japan, Western Europe, and such advanced develop-ing countries as Brazil and Korea have preserved or increased their export share in the face of higher energy costs, and also managed to achieve export growth close to or exceeding the growth of world trade.
Various reasons for the U.S.'s declin-ing export position have been bandied about: cheaper labor abroad, export subsidies paid by foreign govern-ments, lower standards of quality that make foreign products less expensive to produce, and the historically over-valued dollar. At one time these rea-sons may have been valid. Today, however, I believe there is a subtler and more pervasive reason that we have fallen behind. It goes beyond even our chronic dependence on im-ported oil and comes down to our basic attitudes about exporting.
The U.S. does not think of itself as an exporting nation. For us, exporting is an afterthought. Surrounded by the biggest and richest home market in the world, U.S. companies do not feel they need foreign sales in order to expand and grow. Nor has the United States, fortified by a wealth of natural re-sources, had to depend on exports for its economic survival, as many coun-tries do. Thus foreign trade has ranked
low on the list of national priorities, with government policies offering little aid, and many obstacles, to would-be exporters.
Industry and government must share the responsibility for turning this situation around and so, to a lesser degree, must the professional people (accountants, lawyers, bankers and others) who advise business leaders. In a variety of ways, the private, public, and professional sectors must begin now to stimulate export growth.
Industry: a Four-Part Strategy
The first step for industry is to start looking at the positive side of export-ing. Admittedly, selling in export mar-kets involves complications that selling in the U.S. does not. However, it sometimes seems that U.S. business-men concentrate so much on potential problems that they forget the oppor-tunities. Out of an estimated 300,000 manufacturing firms in this country, only 25,000 are exporters. Just 250 companies, most of them large cor-porations, produce 80 percent of U.S. exports.
Fear of excessive paperwork, cum-bersome financing and shipping ar-rangements, and all the unknowns of doing business in a foreign land too often outweigh the profit motive and prevent any realistic assessment of a company's chance of success as an exporter. Thus, many companies that could do well in foreign markets never try to sell their products abroad and so, in a sense, cheat themselves of potential profits and growth.
Our "export inertia" shows up in the
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